Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Caution grips European stocks as investors punish earnings misses

Stock MarketsNov 06, 2018 05:03AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

By Helen Reid

LONDON (Reuters) - European shares dipped on Tuesday as investors punished companies like Zalando and Pandora that missed expectations, while caution prevailed ahead of U.S. mid-term elections.

The pan-European STOXX 600 (STOXX) dipped 0.1 percent while the euro zone's leading index (STOXX50E) fell 0.3 percent.

While politics dented Italian stocks, company results dominated the wider market, with some poor showings hitting shares.

Zalando (DE:ZALG) shares tumbled 7.4 percent after Europe's biggest online-only fashion retailer reported its slowest rate of sales growth since it was launched a decade ago, and recorded a loss due in part to unseasonably warm weather.

"The shift to mobile, fast fashion and beauty is driving down basket size, competition is putting pressure on gross margin, and Zalando's build out of distribution centers across Europe whilst transport costs are increasing has put upward pressure on the fulfilment cost ratio," wrote Berenberg analysts.

Pandora (CO:PNDORA) fell 4.2 percent after the Danish jewelry maker slashed its 2018 sales outlook for the second consecutive quarter, saying it would review its strategy and launch a new cost-cutting program.

Shares in Austrian engineering group Andritz (VI:ANDR) fell 5.2 percent after it missed third-quarter operating profit forecasts due to higher costs at its metals unit and lower earnings at its hydro operations.

Many companies this earnings season have flagged a squeeze on margins from rising commodity and wage costs.

Worries over Italy's budget also weighed, and Italy's FTSE MIB (FTMIB) lagged, down 0.8 percent.

Bank stocks (FTIT8300) fell 1.4 percent as government bond yields rose after euro zone finance ministers called on Italy to change its budget at a Eurogroup meeting on Monday.

Euro zone business growth slumped to a two-year low in October as growing trade tensions and tariffs, alongside rising political uncertainty, put a dent in exports and optimism, the euro zone PMI services survey for October showed.

Overall earnings expectations are holding firm despite weaker economic data.

"We think there's a lot of potential that might be unlocked on the European side but unfortunately there are some idiosyncratic stories that have slowed down the potential for European equities," said Monica Defend, chief strategist and deputy head of group research at Amundi.

More encouraging results gave a boost to some.

Staffing firm Adecco (S:ADEN) rose 4.4 percent after its results met expectations and margins were stronger, with analysts saying the shares had been pricing in much of the euro area's slowing economy.

Spanish wind turbine maker Siemens Gamesa (MC:SGREN) surged 10.2 percent after reporting strong order intake.

Danish peer Vestas Wind (CO:VWS) also climbed 3.1 percent.

Morphosys (DE:MORG) shares jumped 7.2 percent after it forecast revenues at the upper end of its guided range.

Postal and logistics firm Deutsche Post (DE:DPWGn) gained 1.9 percent after its profit decline was less steep than analysts had expected.

Caution grips European stocks as investors punish earnings misses
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email